eMarketer Webinar: What Retailers Need to Know About Online Holiday Shopping Behavior

©2011 eMarketer Inc.

Jeffrey Grau

Principal Analyst

S E P T E M B E R 8, 2 0 1 1

What Retailers Need to Know About Online Holiday Shopping Behavior

Sponsored by:

©2011 eMarketer Inc.

Today’s agenda

Online holiday season outlook

What to expect from deal-seeking holiday shoppers

How holiday shoppers will use:Mobile

Social

Traditional online channels

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Ecommerce is largely insulated from macro-economic conditions

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The US Department of Commerce released even more bullish estimates

It reported ecommerce growth above 17% for the first half of 2011

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“We had a solid holiday last year, and we’re forecasting similar results in 2011. The more price-conscious consumers become, the more comparison shopping they’re going to be doing.”

“It was a banner year for online sales last holiday season. This year we can expect that online sales should be very robust again.”

“We predict 15% to 20% online sales growth. Ecommerce seems to be insulated from what is going on in the macro economy right now.”

Scot WingoCEOChannelAdvisor

Eric BestCEOMercent

Chad WhiteResearch DirectorResponsys

What is your outlook for the online holiday shopping season?

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The experts said online holiday sales will be at least as strong as they were in 2010

Online holiday sales grew 12% in 2010

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Today’s agenda

Online holiday season outlook

What to expect from deal-seeking holiday shoppers

How holiday shoppers will use:Mobile

Social

Traditional online channels

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Holiday season shoppers are versatile at using the web to find deals

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Daily deal sites will be a popular holiday gift buying destination

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The most popular daily deal categories will be dining and shopping

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Consumers were purposeful in their shopping behavior

67% of consumers researched online prior to purchase

67%

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Holiday shoppers timed their purchases around key promotional periods

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“An increasing percentage of holiday shopping is happening on or before Cyber Monday because consumers are being trained to respond to promotional offers that are associated with those days.”

“Retailers have nowhere else to go but even earlier than Thanksgiving with their promotions. The Halloween to Thanksgiving period is going to be interesting to watch.”

Scot WingoCEOChannelAdvisor

Eric BestCEOMercent

Ryan GibsonVP of marketingRimm-Kaufman

When will retailers start their holiday promotions?

“A lot of retailers are trying to capture consumers’ dollars up front in the season. To get that to happen, retailers are offering bigger incentives.”

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More retailers have been sending email promotions in advance of Black Friday

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Consumers are doing more of their Black Friday weekend buying online

The web accounted for 33% of the average amount spent in 2010

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More retailers are offering Cyber Monday promotions

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Most Cyber Monday spending takes place on office PCs

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The post-holiday period has become a peak shopping period. 45% of consumers shopped after Christmas in 2010, up from 41% in 2009.

©2011 eMarketer Inc.

Today’s agenda

Online holiday season outlook

What to expect from deal-seeking holiday shoppers

How holiday shoppers will use:Mobile

Social

Traditional online channels

©2011 eMarketer Inc.

Mobile is a fast-emerging holiday shopping channel

Mobile’s contribution to retail sales rose from 3.4% to 6.5% in six months

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Even though mobile purchases are on the rise, most smartphone owners used their device primarily for research last holiday season.

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Scanner apps are becoming an increasingly popular mobile research tool

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“The iPhone is what you use on the way to the coffee house; the iPad is what you use when you get there.”

“It presents the potential for a whole new social interaction. You can hand someone your iPad and say, ‘Hey take a look at this.’”

Jeremy LockhornVP, emerging mediaRazorfish

“The iPad opens up more possibilities for discovery, open-mindedness, impulse shopping.”

David HogueVP of experience designFluid

Raven ZacharyPresidentSmall Society

How is the iPad changing shopping behavior?

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Tablet owners make purchases at rates higher than smartphone owners

24% 16%

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Tablet owners not only purchase more than smartphone owners, but they also purchase from different categories.

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Today’s agenda

Online holiday season outlook

What to expect from deal-seeking holiday shoppers

How holiday shoppers will use:Mobile

Social

Traditional online channels

©2011 eMarketer Inc.

Social commerce is still highly experimental for retailers

Social visitors accounted for 1.2% of traffic and 1.6% of sales on retail sites

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Last year, 57% of consumers conducted any one of a variety of holiday shopping activities on social networks

57%

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Retail Facebook pages are influencing purchase decisions

23% of consumers said such pages are “influential” or “extremely influential”

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Consumers follow retailers on Twitter mostly to learn about sales and promotions

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Social network users share Cyber Monday deals with their friends

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Consumers use social media to express their opinions about brands and products.

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Today’s agenda

Online holiday season outlook

What to expect from deal-seeking holiday shoppers

How holiday shoppers will use:Mobile

Social

Traditional online channels

©2011 eMarketer Inc.

Search is the way online consumers begin looking for products

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Retail emails help consumers discover deals

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Expect more retailers to use retargeted display ads to catch holiday shoppers across the web who looked but did not buy on a recent visit to a retail site.

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Mobile: Retailers who will not have a mobile-optimized site ready for the holidays can still audit their site to see what minor incremental improvements they can make to at least create a presentable user experience.

Mobile: A retailer’s tablet app should not just be an extension of its smartphone app. Consider differences in shopping behavior.

Social: Offer exclusive product deals and coupons on Facebook to increase fan counts and encourage sharing.

Social: Focus on relationship building by interacting with fans and offering engaging content.

Key Takeaways

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Search: Adjust search term bids to changes in conversion rates, inventory levels and other variables.

Email: Keep it simple. If emails contain too many messages, recipients will lose sight of what the main value proposition is and how they should respond.

Retargeted display ads: Address the reasons why the purchase was not completed by showing similar products that vary by price, complexity, size, etc.

Real-time analysis: Be prepared to make split-second promotional and pricing decisions to take advantage of shopping behavior and competitor moves.

Key Takeaways

© 2011 IBM Corporation

IBM Coremetrics 4th Annual Online Retail Holiday Readiness ReportIndustry Benchmark Analysis and Best Practice Guide

Online Retail Holiday Readiness Report is a 25+ page annual report highlighting:

– Trends and analyses over the last 12 months compared to previous years

– Predictions for the 2011 holiday online retail sales season

– Best practices and recommendations for online retailers

Get your copy at: www.Coremetrics.com/Holiday2011

© 2011 IBM Corporation

2011 Holiday Readiness Report Highlights

Trends in Online Shopping Consumers are Spending More on More Items Carting and Ordering Hit Record Highs Single-Page ‘Bounce’ Visitors Remain High Mobile Device Usage and Social Media Are Growing Consumer Attention Continues to Decline

Best Practices Focus on the customer lifecycle Retarget Your Browsers and Abandoners Capitalize on the Mobile Channel Cultivate the Social Media Channel

© 2011 IBM Corporation

Visit www.Coremetrics.com for the Benchmark reports and other resources to make this holiday season a success

Visit the IBM Coremetrics Resource Gallery to understand more about Online Marketing Optimization, including Mobile & Social best practices:

www.CoremetricsVoice.com

US 2011 Online Retail Holiday Readiness Report: www.Coremetrics.com/Holiday2011

UK 2011 Online Retail Christmas Season Readiness Report: www.Coremetrics.co.uk

© 2011 IBM Corporation

What Retailers Need to Know About Online Holiday Shopping Behavior

Questions & AnswersRegistrants will receive an email tomorrow that includes a link to view the deck and webinar recording.

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Sponsored by:Presented by:Jeffrey GrauPrincipal Analyst, eMarketer, Inc.